Newsletter No. 42 – September, 2006
2. Report from Kingdom of Saudi Arabia (KSA)
3. Directors Comments
5. Web Site
6. AGM and Meeting in Vietnam
Rayan Hayder, manager of The Arabian Ostrich Company in KSA has sent us a long report of the industry in KSA. This report will form the focus of this news letter.
2. Ostrich Production in KSA & its challenges
The Ostrich production in KSA, has suffered tremendously in the past decade because of the lack of knowledge in the field and the improper dissemination of information from various sources in the industry, with the sole purpose to sell Ostriches to the Saudi Market under the false pretext that Ostrich is “the Goose that lays the golden eggs”. The lack of business morals by many traders seeking to get rid of their breeders birds, found in the rich Saudi investors the opportunity to make use of their financial strength to invest in Ostrich production, without providing them with proper technical support and Marketing advice in this field. After more than ten years since the establishment of the first commercial Ostrich farm in KSA, the Saudi producer is still struggling to survive and maintain his investment.
History of Ostriches in KSA
In the year 1943, the Syrian Ostrich (Struthio camelus syriacius) that inhabited the north of Saudi Arabia, in addition to Syria, Jordan, Iraq and even western Iran, was hunted down and became extinct. This small sized bird (the smallest Ostrich subspecies) was known for its beautiful feathers and hardiness to withstand the harsh weather in that region. With the modernization of the kingdom, the Government started creating new laws and reservations to ensure the survival of many endangered species. The most important institution is the high Commission of Wildlife Conservation and Development currently led by his highness Prince Bandar Bin Saud, in an attempt to support and protect the heritage of his ancestors.
In the early 1990’s, the Ostrich industry was booming with emphasis on breeders market and leather as good sources of profit. Eventually the proposals started pouring on the Saudi investors and by end of 1995, the first commercial Ostrich production farm was established in partnership with “France Autruche” and in the following years, many projects followed in many areas of the Kingdom. All of these projects were managed by overpaid foreign consultants, eventually after a couple of years the downfall of the industry in the world left the Saudi businessmen suffering the lack of markets and the unavailability of a united body to support their work and guide them out of this crisis.
Currently in KSA, there are seven major projects with an average of two thousand breeders or more in each farm. Each project has its complete system already set with large hatcheries and Abattoirs. Nevertheless, none of these projects is currently capable of covering his operating cost even with the tremendous efforts they are instigating. As for the total number of farms, the Ministry of Agriculture claims that there are around 40 projects with 500 birds or more and many still without proper permit papers.
Current market situation:
The Saudi economy is booming and depends mainly on the oil business, which accounts for 95% of its exports with a production of nine million barrels per year. The GDP increased from 1999 to 2003 by 31% (from $161 billion to $211 Billion). Currently, with the higher oil prices we expect more increase. In 2003, the value of the import market of food and beverages was $3.9 billion. The consumption has increased from 2002 to 2003 by 13%. Although Saudi Arabia is a large producer of meat, reaching in 2003 a total production of 456,000 tons of chicken meat alone, the country also imported more than 350,000 tons of frozen chicken meat.
The Saudi population has an annual growth of 3.5% with roughly 70% of the population under 30 years of age. The Saudi food market is known to be traditional, with the population purchasing their food from wholesale markets; this trend has shifted to modern Hypermarkets and western influenced imported consumer goods.
The Saudi Consumer is becoming more aware of his health and is slowly shifting from the traditional heavy cooking to diet products. Although the Market for health and diet is not as developed as in Western countries, it is increasing rapidly. In the midst of all this huge population of 24 million Saudi and 7 million expatriate workers, Ostrich meat should in fact find its market share.
Ostrich meat market:
The sales of Ostrich meat are currently limited to large supermarkets and whilst the Saudi consumer is starting to be aware of this delicate meat, but the turn over rate is still very low. The major factors affecting its development relates to several factors:
Poor Marketing strategy: The Ostrich producers in Saudi Arabia do not have the adequate team to instigate proper promotion and marketing for their meat, they started to introduce the product to the supermarkets prior to any market research or professional assistance.
Inadequate advertising campaigns: The lack of effort to promote on a national scale the healthy attributes of the Ostrich meat as the new low fat red meat made it more difficult for the consumers to accept it.
Variation in meat quality and prices: This variation on meat quality and prices is the major factor that hinders the development of sales; the ostrich meat displayed in supermarkets varies tremendously from one producer to another in color and tenderness. Furthermore, many lack the correct branding, packaging and labelling to give the needed assurance to the consumer. Many companies failed to maintain sales because of the negative impact of their product mainly with the growing awareness of the Saudi consumer.
Furthermore, the price variation between one producer and another has a very negative impact on the meat sales and sometimes reach 30% in difference, which the consumer is unable to understand.
Lack of cooperation between producers: This hinders any possibility to establish standards for the ostrich industry; nevertheless, the WOA at this stage will be able to play a larger role in developing such future cooperation.
Limited export deals: Although Saudi Arabia has joined the WTO, still the export of meat and live birds is limited to Gulf countries and Asia since there is no access to EU countries except for tanned Ostrich skins.
Limited Governmental support: The Ostrich producers failed to win the support of the Ministry of Agriculture and many governmental agencies, because of the absence of an active association that can act on behalf of the industry as a whole to get the same level of support as other Agriculture sectors.
Ostrich Industry and its potential role:
During the last 3 years, a few pioneering Ostrich producers started realizing that the industry must move forward and learn from past mistakes to ensure a future role in the market. Thus, we can observe the following slow changes:
Ostrich Abattoirs with HACCP and ISO 9000 certifications: Provide the consumer a sense of food safety and quality assurance.
Ostrich meat branding: A better exposure and display in meat sections inside Hypermarkets, furthermore, the meat is included in weekly flyers in colored promo packs.
Ostrich meat processing: Currently we can find in stores new Ostrich products like Burgers, Franks, Roast and Ostrich ham. Such diversity helps in having long shelf life products in attractive packages for a wider consumer choice.
Specialized restaurants in Ostrich meat: By the end of 2004, a new line of restaurants opened in Riyadh City, Capital of KSA that specializes in different meals made solely of Ostrich meat. Such work is still in progress and requires more development.
Ostrich chicks and eggs export to foreign countries: Because of the lower cost of production mainly in labor, fuel and feed. Saudi Arabia is in a better situation to export chicks and eggs to some countries. Such attempts will not persist if the quality produced is not consistent and competitive.
Ostrich and Crocodile tannery in KSA: Although, the production is in its early beginnings, nevertheless, one Saudi Company succeeded in creating the first tannery in the Gulf. The vast experience of the South Africans was a major factor in developing this project and succeeding in winning the support of most of the producers in the kingdom that have created a fair market for salted skins.
In concluding, I need to stress again on the importance of a united body that will help and promote the welfare of the Ostrich Industry. Perhaps I am accused of being biased when I try to promote the objectives of the WOA, but during my long struggle in this field, I never found the substitute.
ENG. Rayan A. Hayder
AOC Project Manager
I. The Ostrich by Dr. Horbańczuk
II. The Ministry Of Agriculture in Gassim, KSA
III. The Danish Embassy in Saudi Arabia newsletter
IV. ESSA food and Agriculture indicators in Saudi Arabia (source FAO and World Bank)
V. Food Market in Southeast Asia Data Center
3. Directors Comment
The answers are then pretty simple and elementary as we just have to adopt principles already proven in mainstream livestock production. This is difficult to accomplish while our industry remains fragmented. The overview answer has always been to convert ostrich to a livestock industry based on production agriculture technology with an aggressive and well supported infrastructure to handle all the inner workings right through to the consumer. That is the aim of the World Ostrich Association.
The answers are pretty simple and elementary as we simply have to adopt principles already proven in mainstream livestock production. Accomplishing this while our industry remains fragmented and too few managers of ostrich operations with experience of modern production agriculture makes it most difficult to get started with a meaningful effort to solve the situations. The overview answer has always been to convert ostrich to a livestock production agriculture technology with an aggressive and well supported infrastructure to handle all the inner workings right through to the consumer. That is the aim of the World Ostrich Association.
The introduction of two things will lead to the success of ostrich:
- Modern livestock production technology
- Modern market planning with a good support infrastructure
When both of those items come together properly, ostrich will become the industry we all know it can be.
To date when the market planning and support infrastructure is there---the livestock production technology is not, so it all fails. When the production technology is there---the market planning and support infrastructure is not, so again it all fails again.
We can place our hands on the wound and know the correct treatment, but it requires sufficient people involved to understand this to implement that treatment successfully.
In January 2005 we put forward the idea of WOMRAD, a commercial company to bring these things together in a collaborative effort. Over the months we have, through the newsletters, identified different areas that WOMRAD can implement with cooperation of all participants. The following are areas identified over since January 2005 that WOMRAD can introduce and implement. Some items you will recognise as now in place:
- Reduce Production Costs
- Implement Quality Standards
- Introduce Best Practices
- Branding and Quality Marks
- Marketing Support
- Monitor Market Trends and Disseminate the Information
- All benefit through pooling resources
- Implement solutions to improve health and production
- Set achievable high production goals
- Introduce Benchmarking
- Support members to produce Quality and Consistency of supply
- Put in Place Quality Assurance Programs
- Research and Training
- Build a Value Chain Approach
The meeting our members from Vietnam are hosting next month http://www.world-ostrich.org/vietnam.htm is an opportunity to discuss all these issues and develop the strategies required to implement the treatment. We hope to see many of you in Vietnam.
5. Web Site
The updated web site is now up and running. Please let us know if you have any ideas on items you would like to see, or developments. Also please let us know if you notice any glitches, links not working etc.
The Fourth Annual General meeting of the World Ostrich Association to is be held at 33 Eden Grange, Little Corby, Carlisle, England on Tuesday, 19th September 2006 at 5:00pm BST (British Summer Time, GMT+1). A simultaneous broadcast to the WOA Chatroom enables all WOA membership to participate in the meeting on-line.
All members should have details of your User Name and Password to enable you to have access to the Members only pages on the web site. Please email the secretary if you require a reminder. The following link provides access to the reports and voting form http://www.world-ostrich.org/member/agm2006.htm.
1. The Chairman's Welcome Address
2. The Chairman’s Report
3. The Financial Statement for the year ended 30th June 2006 (requires your vote)
4. Election of Directors – there are no nominations so the standing directors Craig Culley, Rayan Haydar and Daryl Holle) are therefore re-elected
5. The Officers for the coming year
7. Any Other Business (please see note below)
Please note that whilst the meeting is physically taking place at the registered office - the meeting broadcast 'on line' through the Chat room (http://www.world-ostrich.org/member/chatroom.htm), enables every member may to take part. In order for all to participate, to ensure the meeting runs smoothly and work within the limitations of an Internet Chat room, there are a few changes from the normal process for such a meeting. The limitations of an Internet Chat room, which is restricted to typing only, require all reports read prior to the meeting to save time.
If any have questions or need clarification prior to voting, please email the secretary or send a question to the members’ list: firstname.lastname@example.org.
The form for voting is at the web site http://www.world-ostrich.org/member/agmvote6.htm
This is on a secure site and you will require your username and password.
Please follow the instructions and work through the form being very careful not to press enter as you move down the form.
You can submit your votes any time.
Cut off time will be 3.00 pm BST (GMT+1), 2 hours prior to commencement of the meeting.
There will be no votes accepted at the meeting.
The Chairman will announce the result of the votes at the meeting.
Any Other Business
If you have any points that you would like to raise, please put them on the comments form at the end of the voting form.
The chat room environment does not work well for discussions. Therefore the Chairman will announce any requests for items to be included under ‘Any other Business’ but discussions will be taken to the Members list and carried out during the week following the meeting. Those attending the meeting in Vietnam on 25th September will have an opportunity to discuss any issues raised at a physical meeting.
The meeting in Vietnam falls within a week of the AGM, so those attending the seminar in Vietnam can meet and discuss those issues during the WOA members’ only meeting held on the eve of the seminar.
Any comments or suggestions, please post either to the members list email@example.com or Craig at firstname.lastname@example.org
Ask not only what the WOA can do for you but also what you can do for the WOA.